Wanted: Retail [Wine] Therapy

I know that it is not easy to make good wine. And wine can be difficult to sell, too. But apparently buying wine is even harder.

That ’70s Wine

At least that’s the word from some top wine critics. Lettie Teague’s column in this weekend’sWall Street Journal was ostensibly about that 1970s favorite, Pouilly-Fuissé, but much of it was actually a gentle rant about the difficulty she experienced in trying to buy a few bottles for a tasting. Seems the specialist wine merchants she contacted just didn’t have much in stock. She had to work pretty hard to put together a reasonable sample.

Is it just a Pouilly-Fuissé problem? Maybe, but Teague reported much the same experience a couple of weeks ago when she tried to put together a tasting of wines from Washington state. Teague’s merchants carried just a bottle or two of Washington wine, same as that 70’s wine. That’s all we need, they told her. No one cares, they said.

What do Washington wines have in common with the French? I used to think it was latitude but now I know — you can’t buy them in New York! (BTW word of mouth evidence suggests that Washington wines might be easier to find in New York than Teague’s article indicates.)

Mind the Gap

I know there are many factors at work here including New York’s peculiar retail wine regulations, the dollar-euro exchange rate and especially the recent “flight to safety” among wine sellers who seek to minimize inventory in a very uncertain market.

America’s byzantine interstate wine trade regulations are part of the problem, too. I’ve often looked across the pond to Britain and imagined how great it would be to have a unified wine market (without dozens of state and even local regulatory regimes). Wine is easier to sell in Britain because of this and so I’ve always thought that it was easier to buy, too. I guess I forgot my own frustrated wine buying experiences living in London a few years ago, when I tried to find interesting U.S. wines to share with British friends; pretty much all I could find in my local drinks shop was bottom shelf generics.

I was reminded of this by one of Jancis Robinson’s recent Financial Times columns where she vented her frustration about trying to buy just a bottle or two of very good wine for dinner. You can buy vast quantities of cheap and cheerful wine as Tesco, she said, and of course you can purchase many of the finest wines on earth by the case and have it delivered to your door the next day. But what if you just want one bottle of something a notch or two above the supermarket category?

Yes, you can do it, she said, but it isn’t easy. And then she listed the five British merchants that she thinks fill the bill. Five! Ouch. “… this list is just about it – in a country of 33.4m wine drinkers,” she moaned. The gap between BOGOF Tesco and a case of Chateau Lafite is bigger than I thought! Robinson cites the increasing dominance of the big supermarket chains as a critical factor driving the specialist wine merchant out of business. Tesco, of course, is now the world’s largest wine merchant and 70% of British wine comes from a supermarket shelf.

Decanter published an article last year (in the 2009 California supplement) bemoaning the fact that so few American wines are available in the UK. Bottom and top are easy enough to find, but nothing much in the vast middle. They cited a number of factors including American winemakers’ resistance to the deep discounts needed to make export sales, high British retail margins and the incompatibility of American wine styles and British palates. Whatever the reason, it seems that British wine buyers are surprisingly under-served when it comes to America’s diverse wine array.

Why Can’t a Wine Be More Like a Book?

It occurs to me that the situation facing wine buyers today is a lot like book buying was twenty years ago. It was easy to find best sellers and trashy paperbacks. And specialist shops catered to particular interests at a price. But much of the vast book supply was very difficult for buyers to access.

And then came Amazon.com, of course. And now the world of new and used books is only a click away.

Wouldn’t it be great if there were an Amazon.com for wine? That would be one “killer app,” as they say. But I don’t think it is going to happen, at least not soon. Amazon.com announced plans to start selling wines online a couple of years ago, but nothing seems to have come of it and it is easy to see why.

Although bottled wine does share many of the attributes that made books Amazon.com’s initial target market, there are a number of discouraging negatives to consider. Wine is heavy and costly to ship compared to books. A books doesn’t care if the weather is hot or cold while it is in transit, but your half-case of Chianti surely does. And of course there are the legal barriers that restrict interstate shipping at every turn.

I’m hoping that someone will come along with that Killer Wine App that makes fine wine buying as efficient as shopping for books, but until then I think that retail [wine] therapy will remain a source of frustration, not relief, for at least some of us.

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Jancis Robinson’s column in Saturday’s Financial Timessuggests that wine books share some of the same distribution frustrations as wine. She reports a trend towards self-publication of specialist wine books.

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7 responses

I am a bit surprised you wrote at length on this subject without mentioning HR 5034, a bill pending in the US congress that will allow states to treat out-of-state wines differently (over turning the 2005 S. Ct. case Granholm v. Heald). Books are treated differently than alcohol not only in a regulatory structure, but in our constitution. And this is a key difference going forward. The reason why there isn’t an amazon.com for wine, unfortunately, is more legal then economic.

This reminds me of a rather disappointing experience from two weeks ago here in Bogotá, Colombia. I had a wine-loving friend visiting from Peru and so I purchased two tickets to the big annual wine expo (ExpoVino), which was supposed to feature wines from six countries, including the US. I thought I might have better luck finding a few nice California or Washington wines that I’ve been missing than I have had in the local supermarkets. But, to my chagrin, only low end Beringer, Kendal Jackson, and Robert Mondavi were available – same as the supermarkets. This has been a bit of mystery to me because there is such a large variety of good middle- and high-end wine available from Chile, Argentina, Spain, France, and to a lesser extent, Italy. Why can the rest of the world export a full range of good wine to Colombia, but the US, the world’s largest exporter (when you count both goods and services), can’t seem to get anything but the most ham-fisted bulk production wines out the door?

‘Twas ever thus. Here in Australia, it is effectively impossible to find South African wines-despite there being hundreds of good value to great wines on offer. Most, I believe, are destined for the UK market. US wines are few and far between as well….and not even any Chateau St. Michelle. sigh…..

On the subject of finding American wine in the UK, try finding Washington wine in the UK. No supermarket stocks it, and I can only recall once being able to find a bottle of Chateau Ste Michelle it at Oddbins about five years ago. Aside from that one encounter, Washington Wine is nonexistent on the British High St.

Of course Berry Bros stocks some bottles from Andrew Will, but £35 for a bottle is more than I typically spend. There are a couple of smaller online merchants that have the odd bottle, but nothing seemed that inspiring. I’ve resulted to bringing a case back with me each time I visit.

Harpers recently published a supplement on Washington Wine and their conclusion was that as Washington growers managed to sell all of their wine within in the US, they had no need to market it abroad. Do wish they’d change their minds!

Having worked for a distributor in Arizona that specialized in representing 42 small- production, artisanal wine producers, I can give you some insight as to how difficult it was to break down the barriers that exist in trying to open up a harried restaurant owner’s perceptions, or to get just a few minutes of precious tasting time with a retail buyer.

Most of these people are crazy busy, especially given the state of the economy since late 07, early 08 (coincidentally, the distributor opened its doors in spring of 08; in retrospect, not the best time to open a new business based on “discretionary spending”), as most of them (those who survived layoffs, firings, downsizings and closures) are doing double- and triple-duty.

Now ask them to take a chance on a completely new (to them) winery, with little or no recognition outside of the Pacific Northwest. Now put that up against the “big boys” from around the world having to dump product that hasn’t moved in 18 months and are resorting to huge discounts, multiple “buy one, get three” offers, gifts, etc.

Factor in the decline of consumer spending in the on-premise (restaurant) segments of the marketplace and you begin to see how it’s not a friendly climate for risk, monetary or palate-wise. With all of that, the number of distributors has declined precipitously, the big distributors have pared their books to those lines that sell effortlessly and in large amounts; in the end, the small wine maker and the consumer have less choices available.

And all of this is just in the U.S., let alone how many other hoops must be jumped through (with attendant costs to every hoop) to get the vino across an ocean or two.

Oh, and the distributor who took a chance and tried to bring artisanal and small-production to a marketplace that had little experience with them? Sadly, they closed the doors in August, 2009, along with 5 other small- and medium-sized distributors in the Phoenix/Scottsdale area of Arizona.

Re: janice — most of the OR and WA producers that I know of (outside of the “big labels”) have pulled back and are trying to sell their wines through tasting rooms, member’s clubs and mailing lists. They would love to have other markets open to them and actually sell some wine, but don’t have the distribution to do so.

I remember seeing a huge window display of Chateau Ste. Michelle in a London wine shop back in 1995, and it made me laugh.

The problem here is because prohibition didn’t ‘end’, the feds just gave the states the right to regulate it. So we have 50 totally different laws. Amazon or someone could sell a lot of wine, but dealing with 50 states, taxes, regulations etc. make it impossible to manage. And it’s illegal in some states.

The barriers to selling wine are truly depressing. Whenever I travel to a different area, I go and see what Washington wines are on the shelves. Inevitably the wines are from the large production shops. Part of this is because many of the wineries in Washington are small. However, part of it is because of the difficulties of selling wine state-by-state.

It was a real eye-opener to travel to Vancouver, BC and see the Washington wine there at 100%+ markup. About two hours from Seattle, it would cost you over twenty Canadian dollars to buy a bottle of Red Diamond Merlot that would cost me $8-10. As a result, Canadians don’t really see our wines up there even though they are relatively close. Similarly, we don’t see BC wines much here in Washington. What a pity.